Latino Poverty Rate Climbs to 28%

While Latinos are gaining in political clout, they are also falling down the  economic ladder, new Census numbers show.

Latinos poverty rates climbed to 28 percent after the census reconfigured its  algorithm to take into account medical costs and government programs. The  Hispanic poverty level rose after the government took into account safety-net  programs such as food stamps and housing, which have lower participation among  immigrants and non-English speakers.

Among the Findings:

—If it weren’t for Social Security payments, the poverty rate would rise to  54.1 percent for people 65 and older and 24.4 percent for all age groups.

—Without refundable tax credits such as the earned income tax credit, child  poverty would rise from 18.1 percent to 24.4 percent.

—Without food stamps, the overall poverty rate would increase from 16.1  percent to 17.6 percent.

“These figures are timely given the looming expiration of two key measures  that account for part of these programs’ large antipoverty impact: federal  emergency unemployment insurance and improvements in refundable tax credits”  such as the Earned Income Tax Credit, said Arloc Sherman, a senior researcher at  the Center for Budget and Policy Priorities, a liberal-leaning think-tank.  “Letting these measures expire at year’s end could push large numbers of  families into poverty.”


Overall, the ranks of America’s poor edged up last year to a high of 49.7  million, based on the new census measure.

The numbers released Wednesday by the Census Bureau are part of a newly  developed supplemental poverty measure. Devised a year ago, this measure  provides a fuller picture of poverty that the government believes can be used to  assess safety-net programs by factoring in living expenses and taxpayer-provided  benefits that the official formula leaves out.

Based on the revised formula, the number of poor people exceeded the 49  million, or 16 percent of the population, who were living below the poverty line  in 2010. That came as more people in the slowly improving economy picked up  low-wage jobs last year but still struggled to pay living expenses. The revised  poverty rate of 16.1 percent also is higher than the record 46.2 million, or 15  percent, that the government’s official estimate reported in September.

Due to medical expenses, higher living costs and limited immigrant access to  government programs, people 65 or older, Hispanics and urbanites were more  likely to be struggling economically under the alternative formula. Also spiking  higher in 2011 was poverty among full-time and part-time workers.

The portrait of poverty broken down by state notably changed. California tops  the list, hurt by high housing costs, large numbers of immigrants as well as  less generous tax credits and food stamp programs to buoy low-income families.  It is followed by the District of Columbia, Arizona, Florida and Georgia.

In the official census tally, it was rural states that were more likely to be  near the top of the list, led by Mississippi, New Mexico, Arizona and  Louisiana.

“We’re seeing a very slow recovery, with increases in poverty among workers  due to more new jobs which are low-wage,” said Timothy Smeeding, a University of  Wisconsin-Madison economist who specializes in poverty. “As a whole, the safety  net is holding many people up, while California is struggling more because it’s  relatively harder there to qualify for food stamps and other benefits.”

Broken down by group, poverty was disproportionately affecting people 65 and  older — about 15.1 percent, or nearly double the 8.7 percent rate calculated  under the official formula. They also have higher medical expenses, such as  Medicare premiums, deductibles and drug costs, that aren’t factored into the  official rate.

Working-age adults ages 18-64 saw an increase in poverty from 13.7 percent to  15.5 percent, due mostly to commuting and child care costs.

In contrast, the new measure showed declines in poverty for children, from  22.3 percent under the official formula to 18.1 percent. Still, they remained  the age group most likely to be economically struggling by any measure.

Hispanics and Asians also saw much higher rates of poverty, 28 percent and  16.9 percent, respectively, compared with rates of 25.4 percent and 12.3 percent  under the official formula. In contrast, African-Americans saw a modest decrease  in poverty, from 27.8 percent under the official rate to 25.7 percent based on  the revised numbers. Among non-Hispanic whites, poverty rose from 9.9 percent to  11 percent.

Economists long have criticized the official poverty rate as inadequate.  Based on a half-century-old government formula, the official rate continues to  assume the average family spends one-third of its income on food. Those costs  have actually shrunk to a much smaller share, more like one-seventh.

The official formula also fails to account for other expenses such as  out-of-pocket medical care, child care and commuting, and it does not consider  noncash government aid, such as food stamps and tax credits, when calculating  income.

In reaction to some of the criticism, the government in 2010 asked the Census  Bureau to develop a new measure, based partly on recommendations made by the  National Academy of Sciences. It released national numbers based on that formula  for the first time last year. This year’s release features a 50-state breakdown  on poverty, prompted in part by local officials such as New York City Mayor  Michael Bloomberg who have argued that the official measure does not take into  account urban costs of living and that larger cities may get less federal money  as a result.

The goal is to help lawmakers to better gauge the effectiveness of  anti-poverty programs, although it does not replace the Census Bureau’s official  poverty formula.

Based on reporting by The Associated Press.

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